Advertisers will spend 17.8% of online ad budgets for local this year -- up from 14.9%, or $13.5 billion, according to a report by Borrell Associates. The Benchmarking Local Online Media: 2010 Revenue Survey points to mobile as the catalyst driving growth. While local advertising reached $90.4 billion across all media in 2010, mobile will drive local advertising through 2015. Borrell estimates that within five years, two-thirds of the $24 billion in local online advertising -- up from $18 billion in 2012 -- will arrive on mobile devices such as tablets, smartphones, and GPS-enabled laptops. Pure-play Internet companies that offer the best technologies are partnering with legacy media companies with the best local sales forces and promotional strength. Companies like Yahoo, Google, Local.com, Groupon, Zillow, Monster and others find it more productive and lucrative to work with legacy media companies than to compete. In 44 of more than 200 markets Borrell tracks, Groupon or Autotrader. com generate more revenue than the largest local newspaper, TV or radio station online operation in that market, according to the study. This year, about two dozen of Groupon's local offices will generate more than $10 million each. Craigslist brought in about $20 million from its New York location, and about $1.6 million each in Phoenix and Houston. Autotrader.com brings in more than $10 million per site in more than two dozen cities. The study, which analyzes 4,588 U.S. and Canada online operations and advertising projections in 2011, suggests that market share held by pure-play Internet companies has stopped growing. While they held the lion's share of local online ad dollars from zero to 48% between 2000 and 2008, growth for them slowed. The biggest have been forced to form partnerships with local newspapers, TV, radio and directories. AT&T YP.com, Autotrader.com, Groupon, CareerBuilder.com, YP.com in Canada, and Monster.com derive content from their own advertisers. Autotrader.com and Groupon expect to see their respective revenue in the U.S. exceed $1 billion this year. The remainder in the top five should see revenue between $400 million and $475 million. AT&T experienced a 125% increase in mobile searches across the YP Local Ad Network in 2010, according to AT&T Interactive Analytics. The division also estimates YP.com attracts over 30 million monthly online unique visitors. The report points to AT&T's YP.com as an example of a Yellow Page company making a quick adoption, and benchmarks a variety of traditional platforms from newspaper to television to radio.
In a new forecast, technology research firm IDC predicts Android will become the top smartphone platform this year after vaulting to the No. 2 spot in 2010. IDC expects overall smartphone growth to drop to 50% in 2011 from 75% last year as supply starts to catch up with demand. Overall market growth in 2010 was exceptional," stated Kevin Restivo, IDC senior research analyst. "Last year's high market growth was due, in part, to pent-up demand from a challenging 2009, when many buyers held off on mobile phone purchases. The expected market growth for 2011, while still notable, will taper off somewhat from what we saw in 2010." More than 450 million smartphones will ship this year, compared to the 303.4 million in 2010, according to IDC. Smartphones will also continue to outpace demand for regular cellphones, growing four times faster than the overall mobile phone business. The proliferation of Android phones that helped drive smartphone sales last year will push the Google platform to top place in 2011, with a projected 39.5% market share. Symbian -- historically the leading smartphone OS -- will fall to second place, with 20.9%, followed by Apple's iOS, 15.7%, BlackBerry, 14.9%, and Windows Phone 7, 5.5%. "For the vendors that made Android the cornerstone of their smartphone strategies, 2010 was the coming-out party," said Ramon Llamas, an IDC senior research analyst. "This year will see a coronation party as these same vendors broaden and deepen their portfolios to reach more customers, particularly first-time smartphone users." Samsung, HTC, and Motorola are among the manufacturers that have benefited most by selling Android-powered devices. The research firm expects the strategic alliance between Nokia and Microsoft will help both get back into the smartphone race as Windows Phone 7 surges to become the No. 2 mobile operating system by 2015. IDC predicts WP7 will claim 20.9% share by then, ahead of iOS (15.3%) and BlackBerry (13.7%), but still trailing Android's 45.4% share by a wide margin. Symbian will have all but disappeared by 2015, with just 0.2% share, in the wake of Nokia shifting to WP7 as its main smartphone platform.
Shipments of e-readers led by Amazon's Kindle and Barnes & Noble's Nook hit 5.1 million worldwide in the fourth quarter, up 90% from the prior quarter and 116% from a year ago. Both gained market share at the expense of rival devices offered by Sony, BenQ and Hanvon, according to new data from IMS Research. Amazon remained the undisputed leader in the e-reader category, accounting for 59% of devices shipped -- followed by Barnes & Noble at 11%, Sony, 5% and BenQ and Hanvon, each with 4%. Amazon gained 14 percentage points in share during 2010 and Barnes & Noble 3 points. In contrast, Sony's share has shrunk from 19% to 5% in the face of growing competition. The firm noted that the $250 color version of the Nook introduced last fall has been a key to fueling sales of the device, as well as Barnes & Noble beefing up in-store retail support for the Nook and expanding the selection of its eBookstore to 2 million titles. A separate Digitimes report yesterday cited unnamed sources stating that 3 million color Nooks have hit stores in the past year. They also estimated the tablet-like Nook Color had sales of 600,000 to 700,000 per month in January and February. Barnes & Noble said it plans to update the Nook with additional apps, email, an enhanced browser and Adobe's Flash. It will also highlight more content for kids. Overall, IMS Research expects e-reader shipments to increase slightly to 5.2 million units before picking up steam in the second half of 2011 as a result of lower prices and wider availability of features, such as touchscreens and color. Although higher-priced, tablet sales have continued to outpace those of e-readers. In the fourth quarter, tablet sales more than doubled from the previous quarter to 9.4 million units, stemming from strong iPad holiday sales and significant sell-in by the Android-based Samsung Galaxy Tab. Nearly 15 million iPads were sold last year. IMS predicts tablet growth of 242% to 58 million units overall in 2011. That total would account for nearly one-quarter (23%) of the portable PC market, up from 8% in 2010. Despite a flood of new devices from Samsung, Motorola, Research in Motion and others, Apple is expected to maintain a 75% share of the tablet market in this year based on its first-mover advantage and other factors.
Don't call mobile news app Newsy a mere "aggregator." They prefer "curator," thank you very much. And now they get a bit of investor cred with which to put on airs. The Missouri company just closed a $1.5 million funding round. By recent Web investment standards that may seem like a lunch tip, but consider that Newsy is a small start-up in Columbia, Mo. partnered with the Missouri School of Journalism. Its singular business right now is creating two-minute video news clips for apps that sit on the iPad, iPhone, Android and BlackBerry devices. Somewhere in this cool experiment is a glimmer of what a personalized, aggregated TV experience might look like. Newsy is a fascinating app that curates/aggregates with video in much the same way Huffington Post and The Week magazine do in text and images. Its homegrown newscasters pull the content from multiple sources, including some video clips, and wrap them in their own talking head shot. The newscasters gather a main story usually from a video provider and then cluster around it responses and countervailing voices and angles from other sources. The visual convention is to feature a backdrop of the commenting site or news outlet and use pop-up quotes to animate the additional voices. Calling itself multisource Video News Analysis, Newsy is bringing to video-enabled apps a digest-format that Slate.com helped pioneer online over a decade ago in its morning newspaper round-ups. One of the cool things about these apps is their multiple output options as well as multi-sourcing. Each story can run as a video, but they are also accessible in transcript form for those cases where video playback is impractical or just rude, or where the user just wants a quick lean-in scan of highlights. Also links to the original sources of the story are available in a pop-up window. As one would expect from its J-School connection, the Newsy developers are thinking hard about journalistic integrity and proper sourcing. There are drawbacks to the format. After a while, the relentlessly multisourced stories can seem like having someone else reading the newspaper to you: borderline irritating. Third-party video sources work best to keep the curation model from getting tedious. Newsy President Jim Spenser tells me that the business model thus far has been a blend of advertising and content syndication. They are running in-stream ads in some pieces and have banners on most pages. They work with iAds, Google, Tremor and Rhtyhm New Media. As for the $1.5 million windfall, "We are investing the money into hiring more people to help us manage our growth - a combination of editorial, development, marketing and salespeople will be hired." If the newscasters for Newsy look a bit fresh and young, that is because many of them come from just across the street -- the Journalism School from which many recently graduated. Spencer tells me that the Missouri locale has other distinct advantages over a typical start-up's New York or San Francisco address. "Our cost of living makes producing high-quality video content far more economically viable." The 40 full -and part-time staff are producing 350-400 videos a month, he tells me. "Yes, it is a lot of work, but we have developed some great systems and hired remarkable people to create a scalable solution." Maybe a few more bucks on the tech side? I like this app. In fact, MediaPost honored Newsy with an Appy Award for best news app. But the iPad version suffers from weird behavior. The content is organized across multiple tabbed verticals into screens of thumbnails. You drag and drop them into the playlist for continuous play. Not as easy as it sounds, because too often the screen just shifts and scrolls rather than pushes the video to my playlist. Playback, too can offer up some blank screens. In many ways the iPhone version is a tidier way to access a quick news grab, although it lacks some of the advanced personalization features. The coolest aspect of Newsy on iOS is the recent integration of AirPlay. For the million or so people with Apple TV (and I am guessing there is a lot of overlap here with iPhone/iPad owners) app users can send the video stream of saved clips from the device to their TV for playback on the big screen. The potential here is striking. We already know from some content clipping apps that many iPad owners save content from the Web throughout the day to peruse during prime time on the tablet. What if that habit moved to video? The second-screen tablet could become the device that collected and organized video clips that come across the transom or pique one's interest throughout the day. At night, you just toss the accumulated stream onto the TV from your phone or tablet. Now you have truly personalized news programming in the living room. Slap a behavioral tracking engine on this thing and you have automated, individual news. Flipboard meets the TV. Of course, technically, all of this video triaging could be done via set-top boxes like Roku or Google TV, but using mobile as the connective tissue ensures that the content is always available and fully portable to use at the handiest screen. Like the other aggregation (sorry, curation) formats in mobile, Newsy challenges traditional notions of brand loyalty and even content distribution. What is the model for major news outlets that still provide the protein in Newsy's dish? And yet, the multisource hub seems especially effective for consumers especially on mobile devices. It mimics the basic online reflex of consulting various brands. As mobile-to-TV models like AirPlay emerge, then the smartphone or tablet become that obvious link between digital habits and the living room lean-back experience.
I'm writing this week's column on an iPad in Bali, Indonesia. There is a lot of irony in that statement, given the low penetration rate of connected devices and even smartphones in this market. When mobile stats predict that more consumers will access the Web from their mobile devices rather than PCs in the next decade, it is countries like Indonesia that will be driving those trends. However, in a third-world country with over 225 million people, feature phones and brands like Nokia and Sony Erickson are still the dominant players. The iOS and Android battle is not being fought here -- yet. In contrast to my iPhone, which costs a fortune to use locally, I revert to an unlocked feature phone with a local prepaid SIM card to text and call friends and colleagues. Hello, 2002. I already forgot how painful it is to text using any device other than a smartphone, although I can truly appreciate the consistent voice signal and a battery that lasts all day and night - I think I forgot what that was like, too! I find myself limiting the length and frequency of my text messages, and sometimes opting to call when I would ordinarily engage in an exchange of texts. Forget about searching the Web or accessing websites -- and apps, shmapps. All the features we have come to depend on are a no-go on this primitive device, especially for someone accustomed to the streamlined and efficient experience of a modern day smart phone. By the way, this is just a step below how roughly 70% of the U.S. population currently experiences their mobile devices as well. While our feature phones are more feature-rich, smartphones are an exponential leap forward experientially. But you already know that. My current experience reminds me of the implications of the lack of critical-mass adoption of new technologies. It was just over a decade ago when we closely monitored the broadband penetration rate. Consumers with high-speed access experienced the Web very differently than those who were still on dial-up. Pundits pontificated, agencies, marketers and media companies strategized, and technology start-ups got funded based on the tipping point of adoption that would drive significant consumer engagement, commerce -- and the subsequent innovation of what ultimately would become a booming financial ecosystem. 2011 should prove to be the year that the mobile Web crosses another tipping point. This is not the rallying cry of "it's the year of mobile... again." We have been amidst the half-decade of mobile for at least two to three years already. By all estimates, smartphone penetration should be over 50% in the U.S. by the end of 2011. While a significant number of marketers have ongoing mobile marketing programs in place, and have already developed initial key learnings on effectively engaging consumers on mobile devices, there are still plenty of marketers who only dip their toes in the mobile water or have been sitting on the sidelines completely. Expect this to change as the smartphone penetration rate crosses the 50% mark. This seems to be a nice magical round number that motivates action. It's amazing how quickly we take our technology for granted. Could you even imagine life without high-speed Internet access? Without Google? What else do we take for granted?
According to responses from the national Survey of the American Consumer by GfK MRI, Millennials with mobile phones look at texted ads and respond to ads via text far more than do other cell phone owners, followed by GenXers. Baby Boomers trail the pack considerably with regard to these activities. 6.2% of adults (or 12.5 million people) with mobile phones looked at an ad sent with a text message in the last 30 days while 2.65% of adults with mobile phones (5.3 million people) used text messaging to respond to an ad or to make a purchase in the previous 30 days. Millennials (born 1977 to 1994) are 57% more likely than the average cell phone owner to have looked at a texted ad, and 93% more likely to have used text to respond to an ad or to make a purchase. GenXers (born 1965 to 1976) are only 19% more likely than the average cell phone owner to have looked at a texted ad, and 6% more likely to have responded or make a purchase. Mobile Phone Owners and Text Advertising (Previous 30 Days) Looked At An Ad Sent by Text MessageUsed Text Message to Respond to Ad or Purchase Percent of all mobile owners 6.20% 2.65% Number of mobile owners 12,494,000 5,335,000 Percent (±) likely than the average cell phone owner to have looked at a texted ad, respond, or make purchase Age Group Millennials +57% +93% GenXers +19 +06 Boomers -40 -55 Use text for other reasons +66 +70 Source: GfkMRI, March 2011 Setting aside age differences, comfort with texting and how consumers feel about their mobile phone appear to impact the attention paid to texted ads and the use of text as an ad response mechanism, says the report. Cell phone owners who use text for other reasons, such as communicating with friends and family or receiving text alerts, are 66% more likely to have looked at a texted ad and 70% more likely to have used text to respond to an ad or have made a purchase than the average cell owner. And mobile phone owners who agree with the statement, "My cell phone is an extension of my personality" are 85% more likely to have looked at a texted ad and 110% more likely to have used text to respond to an ad or to make a purchase. Anne Marie Kelly, SVP, Marketing & Strategic Planning at GfK MRI, concludes that "... more and more marketers use text as part of their overall messaging strategy... given that more than four billion text messages are sent each day in the US... if older adults were going to take to texted ads or text as a response mechanism, they would have already done so... reaching this group via texting will be a challenge for advertisers." For additional information from GfkMRI, please visit here.
According to the Performics 2011 Mobile Search Insights Study, conducted by ROI Research, focusing on people who use the mobile Web at least weekly, 57% use the mobile Web more than once/day, with 77% using mobile search more than five times in the last month. Overwhelmingly, satisfaction and adoption of mobile search holds true throughout the study: